Hexion gets final approval to access $700 million in DIP financing

By Caroline Salls

Pittsburgh, May 1 – Hexion Inc. received final approval Thursday from the U.S. Bankruptcy Court for the District of Delaware to access the full amount of its $700 million in committed debtor-in-possession financing, according to a company news release.

As previously reported, the company said this financing, combined with cash generated by ongoing operations, is expected to be available and sufficient to meet its operational and restructuring needs on a global basis.

Interest on the $350 million 18-month DIP term loan was set last month at Libor plus 275 basis points with a 0% Libor floor, and interest on the $350 million 18-month DIP revolver will range from Libor plus 200 bps to Libor plus 250 bps, based on availability.

The company said the court also granted final approval for several other customary motions that enable Hexion to continue to meet its operational needs while moving forward with the process toward implementing its de-leveraging plan.

“We expect to implement our de-leveraging plan and emerge from the restructuring process this summer,” chairman, president and chief executive officer Craig A. Rogerson said in the release.

“Our plan now has the support of approximately 90% of noteholders across our capital structure, further demonstrating their confidence in our businesses and our team.

“Upon emergence, with a significantly stronger balance sheet, Hexion will be well positioned to further invest in our specialty product portfolio, generating long-term growth and value for all our stakeholders.”

A hearing on approval for the company to begin to solicit votes on the plan is scheduled for May 22.

Latham & Watkins LLP is acting as legal counsel, Moelis & Co. LLC is acting as financial adviser, and AlixPartners, LLP is acting as restructuring adviser to the company.

Hexion is a Columbus, Ohio-based chemical company. The company filed bankruptcy on April 1 under Chapter 11 case number is 19-10684.

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